2018 Accord on Fire and Building Safety in Bangladesh

On 29th June 2017, global unions and companies agreed to extend the Accord on Fire and Building Safety in Bangladesh by an additional three years as of May 2018. Candriam Investors Group congratulated them on the part they played in the signing of this new Accord and calls upon them to continue their efforts with interested parties.

In April 2013, the Rana Plaza building collapsed, causing the death of over 1100 people and injuring more than 2500. In May 2013, CANDRIAM and other global investors appealed to the Bangladeshi retailing & garment industries to implement systemic reforms that would ensure workers’ safety and welfare, and to adopt zero-tolerance policies on global supply-chain abuses. More specifically, we urged them to join The Accord on Fire and Building Safety (hereafter The Accord), a 5-year independent, legally binding agreement between trades unions, brands and retailers.

More than four years later, The Accord is still contributing to a safer working environment in the Bangladeshi garment industry, through independent inspection programmes, publicly disclosed inspection reports and support for effective remediation, notably through workers’ empowerment (including grievance mechanisms). More than 200 global brands, retailers and importers are now involved, and around 1800 factories have been inspected, with almost 80% of safety issues reported now verified as fixed.

However, structural issues continue to pose a threat to workers’ health and safety, including the financing of action plans with critical terms of commercial negotiation with brands. The crackdown on garment workers and union leaders by the government after the December 2016 wages strikes added further uncertainty to the true sustainability of the progress achieved within the 5-year contract period of The Accord. In that context, last June, Candriam and other investors encouraged companies to extend the term of The Accord. The extension was agreed by all parties that same month.

The newly signed Accord will expire in 2021, before being handed over to a national regulatory body – one supported by the International Labour Organization. Safety training programmes have been extended to all factories and greater emphasis placed on workers’ right to Freedom of Association. This last aspect has, to some extent, been denounced for its unilateral nature, as the government and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) were not invited to provide their view. Aware of The Accord’s limits, CANDRIAM nonetheless believes that the achievements of recent years justify further support to the initiative. While involving many stakeholders sometimes slows the process down, it does offer a better guarantee of improvement in the long term. Candriam, as a responsible investor, will thus continue to try to involve the greatest number of stakeholders.